Asian traders were preoccupied on Monday by Covid crackdowns and fears central banks across the globe are poised to tighten their monetary policies quicker to tame a surge in inflation.
Hong Kong stocks finished with more losses as investors kept a worried eye on a spike in coronavirus cases in Europe that has forced some governments to reintroduce containment measures.
Meanwhile, Tokyo’s key Nikkei index reversed earlier losses to end slightly higher, though traders were largely cautious ahead of a public holiday in Japan.
Shanghai rose as analysts speculated that the People’s Bank of China could unveil some easing measures soon to kickstart growth in the world’s No2 economy, despite a surge in prices in the country.
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The Nasdaq had ended at a new record above 16,000 for the first time on Friday, but the S&P 500, Dow and European markets provided a negative lead after Austria said it would reintroduce lockdowns – and make vaccination mandatory from February – to fight a worrying jump in new infections.
Other countries including Germany, Slovakia, the Czech Republic and Belgium were also bringing in measures.
“Covid infections are rising at an alarming rate around Europe with other EU governments also introducing restrictions with the risk that they may also need to follow Austria’s drastic measures,” National Australia Bank’s Rodrigo Catril said.
The announcements added to the downbeat mood on trading floors with investors expecting central banks to continue winding back the ultra-loose monetary policies put in place at the start of the pandemic, which have been crucial to the global recovery.
Top Federal Reserve officials have indicated they would like to see the bank bring its vast bond-buying programme – known as quantitative easing – to an end quicker than earlier flagged, to fight inflation at a three-decade high.
Oil Markets Contract Again
As well as Tokyo, Singapore, Seoul, Manila and Bangkok rose but Sydney, Wellington, Taipei and Mumbai joined Hong Kong in edging down.
The Nikkei 225 index inched up 0.09%, or 28.24 points, to end at 29,774.11, while the broader Topix index slipped 0.08%, or 1.71 points, to 2,042.82.
The Hang Seng Index dropped 0.39%, or 98.63 points, to 24,951.34. The Shanghai Composite Index rose 0.61%, or 21.71 points, to 3,5582.08, while the Shenzhen Composite Index on China’s second exchange gained 1.42%, or 35.31 points, to 2,525.58.
On oil markets, both main contracts fell again – having tumbled Friday on new Covid fears – as the United States, China and Japan weighed plans to tap their own stockpiles to help battle inflation.
The discussions come after WTI crude last month hit a seven-year high above $80 on rising demand and limited supplies.
OANDA’s Jeffrey Halley added: “If the Eurozone countries move back into more strict lockdowns into the holiday season, the knock-on effects on [oil] consumption will be noticeable.”
MARKETS
Tokyo > Nikkei 225: UP 0.1% at 29,774.11 (close)
Hong Kong > Hang Seng Index: DOWN 0.4% at 24,951.34 (close)
Shanghai > Composite: UP 0.6% at 3,582.08 (close)
New York > Dow: DOWN 0.8% at 35,601.98 (close)
- AFP with additional editing by Sean O’Meara
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